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G.R. No. 187226, January 28, 2015 - CHERYLL SANTOS LEUS, Petitioner, v.
ST. SCHOLASTICAS COLLEGE WESTGROVE AND/OR SR. EDNA QUIAMBAO,
OSB, Respondents.

THIRD DIVISION
G.R. No. 187226, January 28, 2015
CHERYLL SANTOS LEUS, Petitioner, v. ST. SCHOLASTICAS COLLEGE
WESTGROVE AND/OR SR. EDNA QUIAMBAO, OSB, Respondents.
DECISION
REYES, J.:
Cheryll Santos Leus (petitioner) was hired by St. Scholasticas College
Westgrove (SSCW), a Catholic educational institution, as a non-teaching
personnel, engaged in pre-marital sexual relations, got pregnant out of
wedlock, married the father of her child, and was dismissed by SSCW, in
that order. The question that has to be resolved is whether the
petitioners conduct constitutes a ground for her dismissal.
Before this Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to annul and set aside the Decision 1 dated
September 24, 2008 and Resolution2 dated March 2, 2009 issued by the
Court of Appeals (CA) in CA-G.R. SP No. 100188, which affirmed the
Resolutions dated February 28, 20073 and May 21, 20074 of the National
Labor Relations Commission (NLRC) in NLRC CA No. 049222-06.
The Facts
SSCW is a catholic and sectarian educational institution in Silang, Cavite.
In May 2001, SSCW hired the petitioner as an Assistant to SSCWs
Director of the Lay Apostolate and Community Outreach Directorate.
Sometime in 2003, the petitioner and her boyfriend conceived a child out
of wedlock. When SSCW learned of the petitioners pregnancy, Sr. Edna
Quiambao (Sr. Quiambao), SSCWs Directress, advised her to file a
resignation letter effective June 1, 2003. In response, the petitioner
informed Sr. Quiambao that she would not resign from her employment
just because she got pregnant without the benefit of
marriage.5chanRoblesvirtualLawlibrary
On May 28, 2003, Sr. Quiambao formally directed the petitioner to explain
in writing why she should not be dismissed for engaging in pre-marital
sexual relations and getting pregnant as a result thereof, which amounts
to serious misconduct and conduct unbecoming of an employee of a
Catholic school.6chanRoblesvirtualLawlibrary
In a letter7 dated May 31, 2003, the petitioner explained that her
pregnancy out of wedlock does not amount to serious misconduct or

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conduct unbecoming of an employee. She averred that she is unaware of
any school policy stating that being pregnant out of wedlock is
considered as a serious misconduct and, thus, a ground for dismissal.
Further, the petitioner requested a copy of SSCWs policy and guidelines
so that she may better respond to the charge against her.
On June 2, 2003, Sr. Quiambao informed the petitioner that, pending the
promulgation of a Support Staff Handbook, SSCW follows the 1992
Manual of Regulations for Private Schools (1992 MRPS) on the causes for
termination of employments; that Section 94(e) of the 1992 MRPS cites
disgraceful or immoral conduct as a ground for dismissal in addition to
the just causes for termination of employment provided under Article 282
of the Labor Code.8chanRoblesvirtualLawlibrary
On June 4, 2003, the petitioner, through counsel, sent Sr. Quiambao a
letter,9 which, in part, reads:chanroblesvirtuallawlibrary
To us, pre-marital sex between two consenting adults without legal
impediment to marry each other who later on married each other does
not fall within the contemplation of disgraceful or immoral conduct and
serious misconduct of the Manual of Regulations for Private Schools
and the Labor Code of the Philippines.
Your argument that what happened to our client would set a bad example
to the students and other employees of your school is speculative and is
more imaginary than real. To dismiss her on that sole ground constitutes
grave abuse of management prerogatives.
Considering her untarnished service for two years, dismissing her with
her present condition would also mean depriving her to be more secure in
terms of financial capacity to sustain maternal needs. 10
In a letter11 dated June 6, 2003, SSCW, through counsel, maintained that
pre-marital sexual relations, even if between two consenting adults
without legal impediment to marry, is considered a disgraceful and
immoral conduct or a serious misconduct, which are grounds for the
termination of employment under the 1992 MRPS and the Labor Code.
That SSCW, as a Catholic institution of learning, has the right to uphold
the teaching of the Catholic Church and expect its employees to abide by
the same. They further asserted that the petitioners indiscretion is
further aggravated by the fact that she is the Assistant to the Director of
the Lay Apostolate and Community Outreach Directorate, a position of
responsibility that the students look up to as role model. The petitioner
was again directed to submit a written explanation on why she should not
be dismissed.
On June 9, 2003, the petitioner informed Sr. Quiambao that she adopts
her counsels letter dated June 4, 2003 as her written
explanation.12chanRoblesvirtualLawlibrary
Consequently, in her letter13 dated June 11, 2003, Sr. Quiambao informed

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the petitioner that her employment with SSCW is terminated on the
ground of serious misconduct. She stressed that pre-marital sexual
relations between two consenting adults with no impediment to marry,
even if they subsequently married, amounts to immoral conduct. She
further pointed out that SSCW finds unacceptable the scandal brought
about by the petitioners pregnancy out of wedlock as it ran counter to
the moral principles that SSCW stands for and teaches its students.
Thereupon, the petitioner filed a complaint for illegal dismissal with the
Regional Arbitration Branch of the NLRC in Quezon City against SSCW and
Sr. Quiambao (respondents). In her position paper, 14 the petitioner
claimed that SSCW gravely abused its management prerogative as there
was no just cause for her dismissal. She maintained that her pregnancy
out of wedlock cannot be considered as serious misconduct since the
same is a purely private affair and not connected in any way with her
duties as an employee of SSCW. Further, the petitioner averred that she
and her boyfriend eventually got married even prior to her dismissal.
For their part, SSCW claimed that there was just cause to terminate the
petitioners employment with SSCW and that the same is a valid exercise
of SSCWs management prerogative. They maintained that engaging in
pre-marital sex, and getting pregnant as a result thereof, amounts to a
disgraceful or immoral conduct, which is a ground for the dismissal of an
employee under the 1992 MRPS.
They pointed out that SSCW is a Catholic educational institution, which
caters exclusively to young girls; that SSCW would lose its credibility if it
would maintain employees who do not live up to the values and
teachings it inculcates to its students. SSCW further asserted that the
petitioner, being an employee of a Catholic educational institution, should
have strived to maintain the honor, dignity and reputation of SSCW as a
Catholic school.15chanRoblesvirtualLawlibrary
The Ruling of the Labor Arbiter
On February 28, 2006, the Labor Arbiter (LA) rendered a Decision, 16 in
NLRC Case No. 6-17657-03-C which dismissed the complaint filed by the
petitioner. The LA found that there was a valid ground for the petitioners
dismissal; that her pregnancy out of wedlock is considered as a
disgraceful and immoral conduct. The LA pointed out that, as an
employee of a Catholic educational institution, the petitioner is expected
to live up to the Catholic values taught by SSCW to its students. Likewise,
the LA opined that:chanroblesvirtuallawlibrary
Further, a deep analysis of the facts would lead us to disagree with the
complainant that she was dismissed simply because she violate[d] a
Catholic [teaching]. It should not be taken in isolation but rather it should
be analyzed in the light of the surrounding circumstances as a whole. We
must also take into [consideration] the nature of her work and the nature
of her employer-school. For us, it is not just an ordinary violation. It was
committed by the complainant in an environment where her strict
adherence to the same is called for and where the reputation of the

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school is at stake. x x x.17
The LA further held that teachers and school employees, both in their
official and personal conduct, must display exemplary behavior and act in
a manner that is beyond reproach.
The petitioner appealed to the NLRC, insisting that there was no valid
ground for the termination of her employment. She maintained that her
pregnancy out of wedlock cannot be considered as serious misconduct
under Article 282 of the Labor Code since the same was not of such a
grave and aggravated character. She asserted that SSCW did not present
any evidence to establish that her pregnancy out of wedlock indeed
eroded the moral principles that it teaches its
students.18chanRoblesvirtualLawlibrary
The Ruling of the NLRC
On February 28, 2007, the NLRC issued a Resolution, 19 which affirmed the
LA Decision dated February 28, 2006. The NLRC pointed out that the
termination of the employment of the personnel of private schools is
governed by the 1992 MRPS; that Section 94(e) thereof cites disgraceful
or immoral conduct as a just cause for dismissal, in addition to the
grounds for termination of employment provided for under Article 282 of
the Labor Code. The NLRC held that the petitioners pregnancy out of
wedlock is a disgraceful or immoral conduct within the contemplation
of Section 94(e) of the 1992 MRPS and, thus, SSCW had a valid reason to
terminate her employment.
The petitioner sought reconsideration 20 of the Resolution dated February
28, 2007 but it was denied by the NLRC in its Resolution 21 dated May 21,
2007.
Unperturbed, the petitioner filed a petition 22 for certiorari with the CA,
alleging that the NLRC gravely abused its discretion in ruling that there
was a valid ground for her dismissal. She maintained that pregnancy out
of wedlock cannot be considered as a disgraceful or immoral conduct;
that SSCW failed to prove that its students were indeed gravely
scandalized by her pregnancy out of wedlock. She likewise asserted that
the NLRC erred in applying Section 94(e) of the 1992 MRPS.cralawred
The Ruling of the CA
On September 24, 2008, the CA rendered the herein assailed
Decision,23 which denied the petition forcertiorari filed by the petitioner.
The CA held that it is the provisions of the 1992 MRPS and not the Labor
Code which governs the termination of employment of teaching and nonteaching personnel of private schools, explaining
that:chanroblesvirtuallawlibrary
It is a principle of statutory construction that where there are two
statutes that apply to a particular case, that which was specially intended
for the said case must prevail. Petitioner was employed by respondent
private Catholic institution which undeniably follows the precepts or

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norms of conduct set forth by the Catholic Church. Accordingly, the
Manual of Regulations for Private Schools followed by it must prevail over
the Labor Code, a general statute. The Manual constitutes the private
schools Implementing Rules and Regulations of Batas Pambansa Blg. 232
or the Education Act of 1982. x x x.24
The CA further held that the petitioners dismissal was a valid exercise of
SSCWs management prerogative to discipline and impose penalties on
erring employees pursuant to its policies, rules and regulations. The CA
upheld the NLRCs conclusion that the petitioners pregnancy out of
wedlock is considered as a disgraceful and immoral conduct and, thus,
a ground for dismissal under Section 94(e) of the 1992 MRPS. The CA
likewise opined that the petitioners pregnancy out of wedlock is
scandalous per se given the work environment and social milieu that she
was in, viz:chanroblesvirtuallawlibrary
Under Section 94 (e) of the [MRPS], and even under Article 282 (serious
misconduct) of the Labor Code, disgraceful and immoral conduct is a
basis for termination of employment.
xxxx
Petitioner contends that her pre-marital sexual relations with her
boyfriend and her pregnancy prior to marriage was not disgraceful or
immoral conduct sufficient for her dismissal because she was not a
member of the schools faculty and there is no evidence that her
pregnancy scandalized the school community.
We are not persuaded. Petitioners pregnancy prior to marriage is
scandalous in itself given the work environment and social milieu she was
in. Respondent school for young ladies precisely seeks to prevent its
students from situations like this, inculcating in them strict moral values
and standards. Being part of the institution, petitioners private and
public life could not be separated. Her admitted pre-marital sexual
relations was a violation of private respondents prescribed standards of
conduct that views pre-marital sex as immoral because sex between a
man and a woman must only take place within the bounds of marriage.
Finally, petitioners dismissal is a valid exercise of the employer-schools
management prerogative to discipline and impose penalties on erring
employees pursuant to its policies, rules and regulations. x x
x.25 (Citations omitted)
The petitioner moved for reconsideration26 but it was denied by the CA in
its Resolution27 dated March 2, 2009.
Hence, the instant petition.
Issues
Essentially, the issues set forth by the petitioner for this Courts decision
are the following: first, whether the CA committed reversible error in

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ruling that it is the 1992 MRPS and not the Labor Code that governs the
termination of employment of teaching and non-teaching personnel of
private schools; and second, whether the petitioners pregnancy out of
wedlock constitutes a valid ground to terminate her
employment.cralawred
The Ruling of the Court
The Court grants the petition.
First Issue: Applicability of the 1992 MRPS
The petitioner contends that the CA, in ruling that there was a valid
ground to dismiss her, erred in applying Section 94 of the 1992 MRPS.
Essentially, she claims that the 1992 MRPS was issued by the Secretary
of Education as the revised implementing rules and regulations of Batas
Pambansa Bilang 232 (BP 232) or the Education Act of 1982. That there
is no provision in BP 232, which provides for the grounds for the
termination of employment of teaching and non-teaching personnel of
private schools. Thus, Section 94 of the 1992 MRPS, which provides for
the causes of terminating an employment, is invalid as it widened the
scope and coverage of BP 232.
The Court does not agree.
The Court notes that the argument against the validity of the 1992 MRPS,
specifically Section 94 thereof, is raised by the petitioner for the first time
in the instant petition for review. Nowhere in the proceedings before the
LA, the NLRC or the CA did the petitioner assail the validity of the
provisions of the 1992 MRPS.
It is well established that issues raised for the first time on appeal and
not raised in the proceedings in the lower court are barred by estoppel.
Points of law, theories, issues, and arguments not brought to the
attention of the trial court ought not to be considered by a reviewing
court, as these cannot be raised for the first time on appeal. To consider
the alleged facts and arguments belatedly raised would amount to
trampling on the basic principles of fair play, justice, and due
process.28chanRoblesvirtualLawlibrary
In any case, even if the Court were to disregard the petitioners belated
claim of the invalidity of the 1992 MRPS, the Court still finds the same
untenable.
The 1992 MRPS, the regulation in force at the time of the instant
controversy, was issued by the Secretary of Education pursuant to BP
232. Section 7029 of BP 232 vests the Secretary of Education with the
authority to issue rules and regulations to implement the provisions of BP
232. Concomitantly, Section 5730 specifically empowers the Department
of Education to promulgate rules and regulations necessary for the
administration, supervision and regulation of the educational system in
accordance with the declared policy of BP 232.

The qualifications of teaching and non-teaching personnel of private


schools, as well as the causes for the termination of their employment,
are an integral aspect of the educational system of private schools.
Indubitably, ensuring that the teaching and non-teaching personnel of
private schools are not only qualified, but competent and efficient as well
goes hand in hand with the declared objective of BP 232 establishing
and maintaining relevant quality education.31 It is thus within the
authority of the Secretary of Education to issue a rule, which provides for
the dismissal of teaching and non-teaching personnel of private schools
based on their incompetence, inefficiency, or some other disqualification.
Moreover, Section 69 of BP 232 specifically authorizes the Secretary of
Education to prescribe and impose such administrative sanction as he
may deem reasonable and appropriate in the implementing rules and
regulations for the [g]ross inefficiency of the teaching or non-teaching
personnel of private schools.32 Accordingly, contrary to the petitioners
claim, the Court sees no reason to invalidate the provisions of the 1992
MRPS, specifically Section 94 thereof.cralawred
Second Issue: Validity of the Petitioners Dismissal
The validity of the petitioners dismissal hinges on the determination of
whether pregnancy out of wedlock by an employee of a catholic
educational institution is a cause for the termination of her employment.
In resolving the foregoing question, the Court will assess the matter from
a strictly neutral and secular point of view the relationship between
SSCW as employer and the petitioner as an employee, the causes
provided for by law in the termination of such relationship, and the
evidence on record. The ground cited for the petitioners dismissal, i.e.,
pre-marital sexual relations and, consequently, pregnancy out of wedlock,
will be assessed as to whether the same constitutes a valid ground for
dismissal pursuant to Section 94(e) of the 1992 MRPS.
The standard of review in a Rule 45
petition from the CA decision in labor
cases.
In a petition for review under Rule 45 of the Rules of Court, such as the
instant petition, where the CAs disposition in a labor case is sought to be
calibrated, the Courts review is quite limited. In ruling for legal
correctness, the Court has to view the CA decision in the same context
that the petition for certiorari it ruled upon was presented to it; the Court
has to examine the CA decision from the prism of whether it correctly
determined the presence or absence of grave abuse of discretion in the
NLRC decision before it, not on the basis of whether the NLRC decision on
the merits of the case was correct.33chanRoblesvirtualLawlibrary
The phrase grave abuse of discretion is well-defined in the Courts
jurisprudence. It exists where an act of a court or tribunal is performed

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with a capricious or whimsical exercise of judgment equivalent to lack of
jurisdiction.34 The determination of the presence or absence of grave
abuse of discretion does not include an inquiry into the correctness of the
evaluation of evidence, which was the basis of the labor agency in
reaching its conclusion.35chanRoblesvirtualLawlibrary
Nevertheless, while a certiorari proceeding does not strictly include an
inquiry as to the correctness of the evaluation of evidence (that was the
basis of the labor tribunals in determining their conclusion), the
incorrectness of its evidentiary evaluation should not result in negating
the requirement of substantial evidence. Indeed, when there is a
showing that the findings or conclusions, drawn from the same
pieces of evidence, were arrived at arbitrarily or in disregard of
the evidence on record, they may be reviewed by the courts. In
particular, the CA can grant the petition for certiorari if it finds that the
NLRC, in its assailed decision or resolution, made a factual finding not
supported by substantial evidence. A decision that is not supported by
substantial evidence is definitely a decision tainted with grave abuse of
discretion.36chanRoblesvirtualLawlibrary
The labor tribunals respective
conclusions that the petitioners pregnancy
is a disgraceful or immoral conduct
were arrived at arbitrarily.
The CA and the labor tribunals affirmed the validity of the petitioners
dismissal pursuant to Section 94(e) of the 1992 MRPS, which provides
that:chanroblesvirtuallawlibrary
Sec. 94. Causes of Terminating Employment In addition to the just
causes enumerated in the Labor Code, the employment of school
personnel, including faculty, may be terminated for any of the following
causes:ChanRoblesVirtualawlibrary
xxxx
e. Disgraceful or immoral conduct;
xxxx
The labor tribunals concluded that the petitioners pregnancy out of
wedlock, per se, is disgraceful and immoral considering that she is
employed in a Catholic educational institution. In arriving at such
conclusion, the labor tribunals merely assessed the fact of the
petitioners pregnancy vis--vis the totality of the circumstances
surrounding the same.
However, the Court finds no substantial evidence to support the
aforementioned conclusion arrived at by the labor tribunals. The fact of
the petitioners pregnancy out of wedlock, without more, is not enough to
characterize the petitioners conduct as disgraceful or immoral. There
must be substantial evidence to establish that pre-marital sexual

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relations and, consequently, pregnancy out of wedlock, are indeed
considered disgraceful or immoral.
The totality of the circumstances
surrounding the conduct alleged to be
disgraceful or immoral must be assessed
against the prevailing norms of conduct.
In Chua-Qua v. Clave,37 the Court stressed that to constitute immorality,
the circumstances of each particular case must be holistically considered
and evaluated in light of the prevailing norms of conduct and
applicable laws.38 Otherwise stated, it is not the totality of the
circumstances surrounding the conduct per se that determines whether
the same is disgraceful or immoral, but the conduct that is generally
accepted by society as respectable or moral. If the conduct does not
conform to what society generally views as respectable or moral, then
the conduct is considered as disgraceful or immoral. Tersely put,
substantial evidence must be presented, which would establish that a
particular conduct, viewed in light of the prevailing norms of conduct, is
considered disgraceful or immoral.
Thus, the determination of whether a conduct is disgraceful or immoral
involves a two-step process: first,a consideration of the totality of the
circumstances surrounding the conduct; and second, an assessment of
the said circumstances vis--vis the prevailing norms of
conduct, i.e., what the society generally considers moral and respectable.
That the petitioner was employed by a Catholic educational
institution per se does not absolutely determine whether her pregnancy
out of wedlock is disgraceful or immoral. There is still a necessity to
determine whether the petitioners pregnancy out of wedlock is
considered disgraceful or immoral in accordance with the prevailing
norms of conduct.
Public and secular morality should
determine the prevailing norms of conduct,
not religious morality.
However, determining what the prevailing norms of conduct are
considered disgraceful or immoral is not an easy task. An individuals
perception of what is moral or respectable is a confluence of a myriad of
influences, such as religion, family, social status, and a cacophony of
others. In this regard, the Courts ratiocination in Estrada v. Escritor39 is
instructive.
In Estrada, an administrative case against a court interpreter charged
with disgraceful and immoral conduct, the Court stressed that in
determining whether a particular conduct can be considered as
disgraceful and immoral, the distinction between public and secular
morality on the one hand, and religious morality, on the other, should be

10
kept in mind.40 That the distinction between public and secular morality
and religious morality is important because the jurisdiction of the Court
extends only to public and secular morality. 41 The Court further explained
that:chanroblesvirtuallawlibrary
The morality referred to in the law is public and necessarily
secular, not religious x x x. Religious teachings as expressed in public
debate may influence the civil public order but public moral disputes may
be resolved only on grounds articulable in secular terms.Otherwise, if
government relies upon religious beliefs in formulating public
policies and morals, the resulting policies and morals would
require conformity to what some might regard as religious
programs or agenda. The non-believers would therefore be compelled
to conform to a standard of conduct buttressed by a religious belief, i.e.,
to a compelled religion, anathema to religious freedom. Likewise, if
government based its actions upon religious beliefs, it would tacitly
approve or endorse that belief and thereby also tacitly disapprove
contrary religious or non-religious views that would not support the policy.
As a result, government will not provide full religious freedom for all its
citizens, or even make it appear that those whose beliefs are disapproved
are second-class citizens. Expansive religious freedom therefore requires
that government be neutral in matters of religion; governmental reliance
upon religious justification is inconsistent with this policy of neutrality.
In other words, government action, including its proscription of
immorality as expressed in criminal law like concubinage, must
have a secular purpose. That is, the government proscribes this
conduct because it is detrimental (or dangerous) to those
conditions upon which depend the existence and progress of
human society and not because the conduct is proscribed by the
beliefs of one religion or the other. Although admittedly, moral
judgments based on religion might have a compelling influence on those
engaged in public deliberations over what actions would be considered a
moral disapprobation punishable by law. After all, they might also be
adherents of a religion and thus have religious opinions and moral codes
with a compelling influence on them; the human mind endeavors to
regulate the temporal and spiritual institutions of society in a uniform
manner, harmonizing earth with heaven. Succinctly put, a law could
be religious or Kantian or Aquinian or utilitarian in its deepest
roots, but it must have an articulable and discernible secular
purpose and justification to pass scrutiny of the religion clauses.
x x x.42 (Citations omitted and emphases ours)
Accordingly, when the law speaks of immoral or, necessarily, disgraceful
conduct, it pertains to public and secular morality; it refers to those
conducts which are proscribed because they are detrimental to
conditions upon which depend the existence and progress of
human society. Thus, inAnonymous v. Radam,43 an administrative case
involving a court utility worker likewise charged with disgraceful and
immoral conduct, applying the doctrines laid down in Estrada, the Court
held that:chanroblesvirtuallawlibrary

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For a particular conduct to constitute disgraceful and immoral
behavior under civil service laws, it must be regulated on
account of the concerns of public and secular morality. It cannot
be judged based on personal bias, specifically those colored by
particular mores. Nor should it be grounded on cultural values
not convincingly demonstrated to have been recognized in the
realm of public policy expressed in the Constitution and the laws.
At the same time, the constitutionally guaranteed rights (such as the
right to privacy) should be observed to the extent that they protect
behavior that may be frowned upon by the majority.
Under these tests, two things may be concluded from the fact that an
unmarried woman gives birth out of wedlock:
(1 if the father of the child is himself unmarried, the woman is
) not ordinarily administratively liable for disgraceful and
immoral conduct. It may be a not-so-ideal situation and may cause
complications for both mother and child but it does not give cause for
administrative sanction. There is no law which penalizes an
unmarried mother under those circumstances by reason of her
sexual conduct or proscribes the consensual sexual activity
between two unmarried persons. Neither does the situation
contravene any fundamental state policy as expressed in the
Constitution, a document that accommodates various belief
systems irrespective of dogmatic origins.
(2 if the father of the child born out of wedlock is himself
) married to a woman other than the mother, then there is a
cause for administrative sanction against either the father or
the mother. In such a case, the disgraceful and immoral
conduct consists of having extramarital relations with a
married person. The sanctity of marriage is constitutionally
recognized and likewise affirmed by our statutes as a special contract
of permanent union. Accordingly, judicial employees have been
sanctioned for their dalliances with married persons or for their own
betrayals of the marital vow of fidelity.
In this case, it was not disputed that, like respondent, the father of her
child was unmarried. Therefore, respondent cannot be held liable for
disgraceful and immoral conduct simply because she gave birth to the
child Christian Jeon out of wedlock.44(Citations omitted and emphases
ours)
Both Estrada and Radam are administrative cases against employees in
the civil service. The Court, however, sees no reason not to apply the
doctrines enunciated in Estrada and Radam in the instant
case.Estrada and Radam also required the Court to delineate what
conducts are considered disgraceful and/or immoral as would constitute a
ground for dismissal. More importantly, as in the said administrative
cases, the instant case involves an employees security of tenure; this
case likewise concerns employment, which is not merely a specie of
property right, but also the means by which the employee and those who

12
depend on him live.45chanRoblesvirtualLawlibrary
It bears stressing that the right of an employee to security of tenure is
protected by the Constitution. Perfunctorily, a regular employee may not
be dismissed unless for cause provided under the Labor Code and other
relevant laws, in this case, the 1992 MRPS. As stated above, when the
law refers to morality, it necessarily pertains to public and secular
morality and not religious morality. Thus, the proscription against
disgraceful or immoral conduct under Section 94(e) of the 1992 MRPS,
which is made as a cause for dismissal, must necessarily refer to public
and secular morality. Accordingly, in order for a conduct to be considered
as disgraceful or immoral, it must be detrimental (or dangerous) to
those conditions upon which depend the existence and progress of
human society and not because the conduct is proscribed by the beliefs
of one religion or the other.
Thus, in Santos v. NLRC,46 the Court upheld the dismissal of a teacher
who had an extra-marital affair with his co-teacher, who is likewise
married, on the ground of disgraceful and immoral conduct under Section
94(e) of the 1992 MRPS. The Court pointed out that extra-marital affair is
considered as a disgraceful and immoral conduct is an afront to the
sanctity of marriage, which is a basic institution of
society, viz:chanroblesvirtuallawlibrary
We cannot overemphasize that having an extra-marital affair is an afront
to the sanctity of marriage, which is a basic institution of society. Even
our Family Code provides that husband and wife must live together,
observe mutual love, respect and fidelity. This is rooted in the fact that
both our Constitution and our laws cherish the validity of marriage and
unity of the family. Our laws, in implementing this constitutional edict on
marriage and the family underscore their permanence, inviolability and
solidarity.47
The petitioners pregnancy out of
wedlock is not a disgraceful or immoral
conduct since she and the father of her
child have no impediment to marry each
other.
In stark contrast to Santos, the Court does not find any circumstance in
this case which would lead the Court to conclude that the petitioner
committed a disgraceful or immoral conduct. It bears stressing that the
petitioner and her boyfriend, at the time they conceived a child, had no
legal impediment to marry. Indeed, even prior to her dismissal, the
petitioner married her boyfriend, the father of her child. As the Court held
in Radam, there is no law which penalizes an unmarried mother by
reason of her sexual conduct or proscribes the consensual sexual activity
between two unmarried persons; that neither does such situation
contravene any fundamental state policy enshrined in the Constitution.
Admittedly, the petitioner is employed in an educational institution where

13
the teachings and doctrines of the Catholic Church, including that on premarital sexual relations, is strictly upheld and taught to the students.
That her indiscretion, which resulted in her pregnancy out of wedlock, is
anathema to the doctrines of the Catholic Church. However, viewed
against the prevailing norms of conduct, the petitioners conduct cannot
be considered as disgraceful or immoral; such conduct is not denounced
by public and secular morality. It may be an unusual arrangement, but it
certainly is not disgraceful or immoral within the contemplation of the
law.
To stress, pre-marital sexual relations between two consenting adults who
have no impediment to marry each other, and, consequently, conceiving
a child out of wedlock, gauged from a purely public and secular view of
morality, does not amount to a disgraceful or immoral conduct under
Section 94(e) of the 1992 MRPS.
Accordingly, the labor tribunals erred in upholding the validity of the
petitioners dismissal. The labor tribunals arbitrarily relied solely on the
circumstances surrounding the petitioners pregnancy and its supposed
effect on SSCW and its students without evaluating whether the
petitioners conduct is indeed considered disgraceful or immoral in view
of the prevailing norms of conduct. In this regard, the labor tribunals
respective haphazard evaluation of the evidence amounts to grave abuse
of discretion, which the Court will rectify.
The labor tribunals finding that the petitioners pregnancy out of wedlock
despite the absence of substantial evidence is not only arbitrary, but a
grave abuse of discretion, which should have been set right by the CA.
There is no substantial evidence to
prove that the petitioners pregnancy out of
wedlock caused grave scandal to SSCW
and its students.
SSCW claimed that the petitioner was primarily dismissed because her
pregnancy out of wedlock caused grave scandal to SSCW and its
students. That the scandal brought about by the petitioners indiscretion
prompted them to dismiss her. The LA upheld the respondents claim,
stating that:chanroblesvirtuallawlibrary
In this particular case, an objective and rational evaluation of the
facts and circumstances obtaining in this case would lead us to focus our
attention x x x on the impact of the act committed by the
complainant. The act of the complainant x x xeroded the moral
principles being taught and project[ed] by the respondent
[C]atholic school to their young lady students.48 (Emphasis in the
original)
On the other hand, the NLRC opined that:chanroblesvirtuallawlibrary
In the instant case, when the complainant-appellant was already
conceiving a child even before she got married, such is considered a

14
shameful and scandalous behavior, inimical to public welfare and
policy. It eroded the moral doctrines which the respondent
Catholic school, an exclusive school for girls, is teaching the
young girls. Thus, when the respondent-appellee school
terminated complainant-appellants services, it was a valid
exercise of its management prerogative. Whether or not she was a
teacher is of no moment. There is no separate set of rules for nonteaching personnel. Respondents-appellees uphold the teachings of the
Catholic Church on pre-marital sex and that the complainant-appellant as
an employee of the school was expected to abide by this basic principle
and to live up with the standards of their purely Catholic values. Her
subsequent marriage did not take away the fact that she had engaged in
pre-marital sex which the respondent-appellee school denounces as the
same is opposed to the teachings and doctrines it espouses. 49 (Emphasis
ours)
Contrary to the labor tribunals declarations, the Court finds that SSCW
failed to adduce substantial evidence to prove that the petitioners
indiscretion indeed caused grave scandal to SSCW and its students. Other
than the SSCWs bare allegation, the records are bereft of any evidence
that would convincingly prove that the petitioners conduct indeed
adversely affected SSCWs integrity in teaching the moral doctrines,
which it stands for. The petitioner is only a non-teaching personnel; her
interaction with SSCWs students is very limited. It is thus quite
impossible that her pregnancy out of wedlock caused such a grave
scandal, as claimed by SSCW, as to warrant her dismissal.
Settled is the rule that in termination cases, the burden of proving that
the dismissal of the employees was for a valid and authorized cause rests
on the employer. It is incumbent upon the employer to show by
substantial evidence that the termination of the employment of the
employees was validly made and failure to discharge that duty would
mean that the dismissal is not justified and therefore illegal. 50Substantial
evidence is more than a mere scintilla of evidence. It means such
relevant evidence as a reasonable mind might accept as adequate to
support a conclusion, even if other minds equally reasonable might
conceivably opine otherwise.51chanRoblesvirtualLawlibrary
Indubitably, bare allegations do not amount to substantial evidence.
Considering that the respondents failed to adduce substantial evidence to
prove their asserted cause for the petitioners dismissal, the labor
tribunals should not have upheld their allegations hook, line and sinker.
The labor tribunals respective findings, which were arrived at sans any
substantial evidence, amounts to a grave abuse of discretion, which the
CA should have rectified. Security of tenure is a right which may not be
denied on mere speculation of any unclear and nebulous
basis.52chanRoblesvirtualLawlibrary
The petitioners dismissal is not a
valid exercise of SSCWs management

15
prerogative.
The CA belabored the management prerogative of SSCW to discipline its
employees. The CA opined that the petitioners dismissal is a valid
exercise of management prerogative to impose penalties on erring
employees pursuant to its policies, rules and regulations.
The Court does not agree.
The Court has held that management is free to regulate, according to its
own discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay off of workers and discipline,
dismissal and recall of workers. The exercise of management prerogative,
however, is not absolute as it must be exercised in good faith and with
due regard to the rights of labor. Management cannot exercise its
prerogative in a cruel, repressive, or despotic
manner.53chanRoblesvirtualLawlibrary
SSCW, as employer, undeniably has the right to discipline its employees
and, if need be, dismiss them if there is a valid cause to do so. However,
as already explained, there is no cause to dismiss the petitioner. Her
conduct is not considered by law as disgraceful or immoral. Further, the
respondents themselves have admitted that SSCW, at the time of the
controversy, does not have any policy or rule against an employee who
engages in pre-marital sexual relations and conceives a child as a result
thereof. There being no valid basis in law or even in SSCWs policy and
rules, SSCWs dismissal of the petitioner is despotic and arbitrary and,
thus, not a valid exercise of management prerogative.
In sum, the Court finds that the petitioner was illegally dismissed as there
was no just cause for the termination of her employment. SSCW failed to
adduce substantial evidence to establish that the petitioners
conduct, i.e., engaging in pre-marital sexual relations and conceiving a
child out of wedlock, assessed in light of the prevailing norms of conduct,
is considered disgraceful or immoral. The labor tribunals gravely abused
their discretion in upholding the validity of the petitioners dismissal as
the charge against the petitioner lay not on substantial evidence, but on
the bare allegations of SSCW. In turn, the CA committed reversible error
in upholding the validity of the petitioners dismissal, failing to recognize
that the labor tribunals gravely abused their discretion in ruling for the
respondents.
The petitioner is entitled to
separation pay, in lieu of actual
reinstatement, full backwages and
attorneys fees, but not to moral
and exemplary damages.

16
Having established that the petitioner was illegally dismissed, the Court
now determines the reliefs that she is entitled to and their extent. Under
the law and prevailing jurisprudence, an illegally dismissed employee is
entitled to reinstatement as a matter of right.54 Aside from the instances
provided under Articles 28355 and 28456 of the Labor Code, separation pay
is, however, granted when reinstatement is no longer feasible because of
strained relations between the employer and the employee. In cases of
illegal dismissal, the accepted doctrine is that separation pay is available
in lieu of reinstatement when the latter recourse is no longer practical or
in the best interest of the parties. 57chanRoblesvirtualLawlibrary
In Divine Word High School v. NLRC,58 the Court ordered the employer
Catholic school to pay the illegally dismissed high school teacher
separation pay in lieu of actual reinstatement since her continued
presence as a teacher in the school may well be met with antipathy and
antagonism by some sectors in the school
community.59chanRoblesvirtualLawlibrary
In view of the particular circumstances of this case, it would be more
prudent to direct SSCW to pay the petitioner separation pay in lieu of
actual reinstatement. The continued employment of the petitioner with
SSCW would only serve to intensify the atmosphere of antipathy and
antagonism between the parties. Consequently, the Court awards
separation pay to the petitioner equivalent to one (1) month pay for
every year of service, with a fraction of at least six (6) months considered
as one (1) whole year, from the time of her illegal dismissal up to the
finality of this judgment, as an alternative to reinstatement.
Also, employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits or their monetary
equivalent, computed from the time their actual compensation was
withheld from them up to the time of their actual reinstatement but if
reinstatement is no longer possible, the backwages shall be computed
from the time of their illegal termination up to the finality of the
decision.60 Accordingly, the petitioner is entitled to an award of full
backwages from the time she was illegally dismissed up to the finality of
this decision.
Nevertheless, the petitioner is not entitled to moral and exemplary
damages. A dismissed employee is entitled to moral damages when the
dismissal is attended by bad faith or fraud or constitutes an act
oppressive to labor, or is done in a manner contrary to good morals, good
customs or public policy. Exemplary damages may be awarded if the
dismissal is effected in a wanton, oppressive or malevolent
manner.61chanRoblesvirtualLawlibrary
Bad faith, under the law, does not simply connote bad judgment or
negligence. It imports a dishonest purpose or some moral obliquity and
conscious doing of a wrong, or a breach of a known duty through some
motive or interest or ill will that partakes of the nature of

17
fraud.62chanRoblesvirtualLawlibrary
It must be noted that the burden of proving bad faith rests on the one
alleging it63 since basic is the principle that good faith is presumed and
he who alleges bad faith has the duty to prove the same. 64Allegations of
bad faith and fraud must be proved by clear and convincing
evidence.65chanRoblesvirtualLawlibrary
The records of this case are bereft of any clear and convincing evidence
showing that the respondents acted in bad faith or in a wanton or
fraudulent manner in dismissing the petitioner. That the petitioner was
illegally dismissed is insufficient to prove bad faith. A dismissal may be
contrary to law but by itself alone, it does not establish bad faith to
entitle the dismissed employee to moral damages. The award of moral
and exemplary damages cannot be justified solely upon the premise that
the employer dismissed his employee without
cause.66chanRoblesvirtualLawlibrary
However, the petitioner is entitled to attorneys fees in the amount of
10% of the total monetary award pursuant to Article 111 67 of the Labor
Code. It is settled that where an employee was forced to litigate and,
thus, incur expenses to protect his rights and interest, the award of
attorneys fees is legally and morally
justifiable.68chanRoblesvirtualLawlibrary
Finally, legal interest shall be imposed on the monetary awards herein
granted at the rate of six percent (6%) per annum from the finality of this
judgment until fully paid.69chanRoblesvirtualLawlibrarychanrobleslaw
WHEREFORE, in consideration of the foregoing disquisitions, the petition
is GRANTED. The Decision dated September 24, 2008 and Resolution
dated March 2, 2009 of the Court of Appeals in CA-G.R. SP No. 100188
are hereby REVERSED and SET ASIDE.
The respondent, St. Scholasticas College Westgrove, is hereby declared
guilty of illegal dismissal and is hereby ORDERED to pay the petitioner,
Cheryll Santos Leus, the following: (a) separation pay in lieu of actual
reinstatement equivalent to one (1) month pay for every year of service,
with a fraction of at least six (6) months considered as one (1) whole year
from the time of her dismissal up to the finality of this Decision; (b) full
backwages from the time of her illegal dismissal up to the finality of this
Decision; and (c) attorneys fees equivalent to ten percent (10%) of the
total monetary award. The monetary awards herein granted shall earn
legal interest at the rate of six percent (6%) per annum from the date of
the finality of this Decision until fully paid. The case is REMANDED to the
Labor Arbiter for the computation of petitioners monetary awards.
SO ORDERED.cralawlawlibrary
Velasco, Jr., (Chairperson), Peralta, Villarama, Jr., and Jardeleza, JJ., concur.

18
Endnotes: